Demand: Individual Demand, Market Demand, Demand Shifts, Demand Extensions/Contractions

1. A fall in the price of a good causes consumers to buy more of it. What is this called?

A an increase in demand
B an extension in demand
C a decrease in demand
D a contraction in demand

2. The demand curve for a normal good shifts to the right. Which cause is most likely?

A a fall in consumer income
B a rise in consumer income
C a fall in the price of the good
D a rise in the cost of production

3. A demand curve is drawn assuming which factor changes?

A consumer income
B tastes and preferences
C price of the good
D price of substitutes

4. Which change would cause a movement along a demand curve?

A a change in income
B a change in fashion
C a change in the price of the good
D a change in population size

5. Which change would shift the demand curve for tea to the left?

A a rise in the price of coffee, a substitute
B successful advertising for tea
C a fall in consumer income if tea is a normal good
D a fall in the price of tea

6. Which situation shows a contraction in demand?

A price falls and quantity demanded rises
B price rises and quantity demanded falls
C income rises and demand rises
D fashion changes and demand falls

7. Market demand is found by

A adding individual demand at each price
B multiplying price by individual demand
C subtracting supply from total demand
D adding total revenue at each price

8. At $5, consumer A demands 20 units and consumer B demands 30 units. What is market demand if they are the only consumers?

A 10 units
B 20 units
C 30 units
D 50 units

9. Which is most likely to increase demand for electric cars?

A a rise in the price of petrol
B a fall in the price of electric cars
C a rise in tax on electric cars
D a fall in the price of petrol cars

10. Which change would cause demand for a product to decrease?

A a successful advertising campaign for the product
B a rise in the price of a substitute
C a fall in population
D a rise in consumer income for a normal good

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

11. Demand means

A the quantity consumers want
B the quantity consumers can afford only
C willingness and ability to buy at different prices
D the total quantity produced by firms

12. Which factor would not usually shift the demand curve for a good?

A income
B advertising
C price of the good itself
D price of a complement

13. The price of printers falls. What is most likely to happen to demand for printer ink?

A demand for printer ink decreases
B demand for printer ink increases
C quantity demanded of printer ink contracts
D supply of printer ink decreases

14. Which pair of goods is most likely to be complements?

A tea and coffee
B cars and petrol
C rice and bread
D Samsung phones and iPhones

15. Which pair of goods is most likely to be substitutes?

A cars and tyres
B mobile phones and chargers
C butter and margarine
D printers and ink cartridges

16. A rise in the price of butter causes demand for margarine to increase. This is because butter and margarine are

A complements
B substitutes
C inferior goods
D free goods

17. A fall in the price of cars causes demand for petrol to increase. This is because cars and petrol are

A substitutes
B complements
C luxury goods only
D inferior goods only

18. A good becomes fashionable. What happens to its demand curve?

A it shifts right
B it shifts left
C there is an extension along the curve
D there is a contraction along the curve

19. A fall in the price of a good causes

A demand to shift right
B demand to shift left
C an extension in demand
D a decrease in demand

20. A rise in the price of a good causes

A an extension in demand
B a contraction in demand
C an increase in demand
D a rightward shift of demand

21. Which would cause demand for bus travel to rise?

A a fall in petrol prices
B a rise in car parking charges
C a fall in population
D a fall in the price of cars

22. Which would cause demand for restaurant meals to fall?

A higher consumer incomes if meals are normal goods
B lower consumer incomes if meals are normal goods
C successful advertising by restaurants
D a rise in population

23. Which is most likely to be an inferior good?

A luxury watch
B second-hand clothing
C expensive restaurant meal
D private healthcare

24. If income rises, demand for an inferior good usually

A rises
B falls
C remains unchanged
D becomes perfectly elastic

25. If income falls, demand for an inferior good usually

A rises
B falls
C shifts right only if price rises
D moves along the demand curve

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

26. Which statement is correct?

A A fall in price causes demand to increase.
B A fall in price causes quantity demanded to increase.
C A rise in income always causes quantity demanded to contract.
D A rise in price shifts demand right.

27. A demand curve shifts from D1 to D2 to the right. What must have changed?

A the price of the good
B a non-price determinant of demand
C the cost of production
D quantity supplied only

28. A demand curve shifts left. Which statement is correct?

A consumers buy less at every price
B consumers buy more at every price
C the price of the good must have risen
D supply must have fallen

29. Which is an example of derived demand?

A demand for bread by households
B demand for workers because demand for the final product increases
C demand for luxury goods as income rises
D demand for free goods because price is zero

30. Demand for labour in a factory rises because demand for the factory’s product rises. This is

A joint demand
B derived demand
C individual demand
D excess demand

31. Which situation shows a rightward shift of the market demand curve?

A each consumer buys less at every price
B more consumers enter the market
C the price of the good rises
D supply increases

32. A country’s population increases. What is the likely effect on market demand for food?

A demand shifts right
B demand shifts left
C there is a contraction in demand
D quantity supplied falls automatically

33. A medical warning says a soft drink damages health. What is likely to happen to demand?

A it shifts right
B it shifts left
C there is an extension in demand
D there is no possible change

34. A fall in the price of a product from $10 to $8 leads quantity demanded to rise from 100 to 140. What is this an example of?

A increase in demand
B extension in demand
C decrease in demand
D contraction in demand

35. A rise in income causes demand for holidays to rise at every price. What is this an example of?

A extension in demand
B contraction in demand
C increase in demand
D decrease in quantity demanded

36. Which would not affect demand for coffee?

A a change in income
B a change in the price of tea
C a change in coffee drinkers’ tastes
D a change in the wage of coffee farm workers

37. A rise in the wage of coffee farm workers affects coffee mainly through

A demand shifting right
B demand shifting left
C supply shifting left
D quantity demanded shifting right

38. Which event causes demand for umbrellas to shift right?

A a rise in the price of umbrellas
B a forecast of heavy rainfall
C a fall in umbrella production costs
D a fall in the price of umbrellas

39. Which statement about individual and market demand is correct?

A individual demand is always greater than market demand
B market demand is the sum of individual demands
C market demand ignores price
D individual demand is supply by one producer

40. At $4, three consumers demand 6, 9 and 15 units. At $6, they demand 4, 5 and 8 units. What is market demand at $6?

A 9 units
B 15 units
C 17 units
D 30 units

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

41. Which statement correctly distinguishes demand and quantity demanded?

A demand is one amount at one price; quantity demanded is the whole schedule
B demand is the whole relationship between price and quantity; quantity demanded is one amount at one price
C demand means supply; quantity demanded means production
D demand only exists when price is zero

42. A rise in the price of chicken causes demand for fish to increase. What relationship is most likely?

A chicken and fish are complements
B chicken and fish are substitutes
C fish is an inferior good
D chicken is a free good

43. A rise in the price of mobile phones causes demand for phone cases to fall. What relationship is most likely?

A substitutes
B complements
C independent goods
D inferior goods

44. Which would cause both demand and quantity demanded to rise, but in different markets?

A a fall in the price of coffee increases quantity demanded of coffee and increases demand for sugar
B a rise in the price of coffee increases quantity demanded of coffee and increases demand for sugar
C a fall in income increases quantity demanded of coffee and decreases demand for sugar
D a rise in production costs increases demand for coffee and quantity demanded of sugar

45. Which statement is correct about a demand schedule?

A it shows quantities supplied at different prices
B it shows quantities demanded at different prices
C it shows only one price and one quantity
D it shows production costs at different outputs

46. The demand curve slopes downwards mainly because

A producers supply more at higher prices
B consumers are usually willing and able to buy more at lower prices
C firms earn more profit at lower prices
D resources become unlimited as price falls

47. Which situation is most likely to make demand for air conditioners shift right?

A colder weather
B hotter weather
C a rise in the price of air conditioners
D a fall in the supply of air conditioners

48. Which situation causes movement down along a demand curve?

A a fall in the price of the good
B a rise in the price of the good
C a rise in consumer income
D a fall in the price of a substitute

49. Which situation causes movement up along a demand curve?

A a fall in price
B a rise in price
C a rise in advertising
D a rise in population

50. A fall in the price of good X causes demand for good Y to fall. What can be concluded?

A X and Y are substitutes
B X and Y are complements
C X is inferior and Y is normal
D Y has no demand

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

1. Answer: B

A wrong: an increase in demand means the whole demand curve shifts right.
B correct: a fall in price causes movement down along the demand curve, called an extension in demand.
C wrong: decrease in demand means the whole demand curve shifts left.
D wrong: contraction happens when price rises and quantity demanded falls.

2. Answer: B

A wrong: for a normal good, lower income reduces demand.
B correct: higher income increases demand for a normal good, shifting demand right.
C wrong: a fall in the good’s own price causes extension in demand, not a shift.
D wrong: production cost affects supply, not demand.

3. Answer: C

A wrong: income is held constant when drawing a demand curve.
B wrong: tastes are held constant.
C correct: the demand curve shows how quantity demanded changes as the good’s own price changes.
D wrong: prices of substitutes are held constant.

4. Answer: C

A wrong: income changes shift the demand curve.
B wrong: fashion changes shift the demand curve.
C correct: a change in the good’s own price causes movement along the demand curve.
D wrong: population changes shift market demand.

5. Answer: C

A wrong: coffee is a substitute, so higher coffee price increases demand for tea.
B wrong: advertising for tea increases demand for tea.
C correct: if tea is normal, lower income reduces demand and shifts demand left.
D wrong: lower tea price causes extension in demand, not leftward shift.

6. Answer: B

A wrong: price falls and quantity demanded rises is extension in demand.
B correct: contraction in demand occurs when price rises and quantity demanded falls.
C wrong: income change shifts demand.
D wrong: fashion change shifts demand.

7. Answer: A

A correct: market demand is the horizontal sum of individual demand at each price.
B wrong: multiplying price by demand gives total expenditure/revenue, not market demand.
C wrong: subtracting supply from demand may show shortage, not market demand.
D wrong: total revenue is not demand.

8. Answer: D

A wrong: 10 is the difference, not total demand.
B wrong: this is only consumer A’s demand.
C wrong: this is only consumer B’s demand.
D correct: market demand = 20 + 30 = 50 units.

9. Answer: A

A correct: petrol and electric cars may be substitutes in transport use, so higher petrol price can increase demand for electric cars.
B wrong: a fall in electric car price causes extension in demand, not increase in demand.
C wrong: tax on electric cars may reduce demand or supply depending on design, but not the best answer.
D wrong: cheaper petrol cars reduce demand for electric cars.

10. Answer: C

A wrong: successful advertising increases demand.
B wrong: a higher substitute price increases demand for this product.
C correct: fewer consumers reduce market demand.
D wrong: higher income increases demand for a normal good.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

11. Answer: C

A wrong: wanting alone is not enough.
B wrong: ability to afford alone is not enough.
C correct: demand requires both willingness and ability to buy at different prices.
D wrong: production by firms is supply.

12. Answer: C

A wrong: income can shift demand.
B wrong: advertising can shift demand.
C correct: the good’s own price causes movement along demand, not a shift.
D wrong: price of a complement can shift demand.

13. Answer: B

A wrong: cheaper printers usually increase demand for ink.
B correct: printers and ink are complements, so a fall in printer price increases demand for ink.
C wrong: contraction in demand for ink would be caused by a rise in ink price.
D wrong: the question is about demand, not supply.

14. Answer: B

A wrong: tea and coffee are usually substitutes.
B correct: cars and petrol are used together, so they are complements.
C wrong: rice and bread are usually substitutes.
D wrong: Samsung phones and iPhones are usually substitutes.

15. Answer: C

A wrong: cars and tyres are complements.
B wrong: phones and chargers are complements.
C correct: butter and margarine can replace each other.
D wrong: printers and ink cartridges are complements.

16. Answer: B

A wrong: complements are used together.
B correct: butter and margarine are substitutes because one can replace the other.
C wrong: this relationship is not about income.
D wrong: they are not free goods.

17. Answer: B

A wrong: substitutes replace each other.
B correct: cars and petrol are complements because they are used together.
C wrong: the relationship is about joint use, not luxury status.
D wrong: the relationship is not about inferior goods.

18. Answer: A

A correct: fashion becoming favourable increases demand at every price.
B wrong: a left shift means demand falls.
C wrong: extension is caused by a fall in own price.
D wrong: contraction is caused by a rise in own price.

19. Answer: C

A wrong: demand does not shift because of the good’s own price.
B wrong: demand does not shift left because of own price.
C correct: lower price causes an extension in quantity demanded.
D wrong: decrease in demand is a leftward shift.

20. Answer: B

A wrong: extension occurs when price falls.
B correct: higher price causes movement up along demand, called contraction.
C wrong: increase in demand is a rightward shift.
D wrong: own price does not shift demand right.

21. Answer: B

A wrong: cheaper petrol makes car use cheaper, reducing demand for buses.
B correct: higher parking charges make car use less attractive, increasing demand for buses.
C wrong: lower population reduces market demand.
D wrong: cheaper cars reduce demand for bus travel.

22. Answer: B

A wrong: higher income increases demand for normal goods.
B correct: lower income reduces demand for normal goods like restaurant meals.
C wrong: advertising increases demand.
D wrong: higher population increases market demand.

23. Answer: B

A wrong: luxury watches are normal/luxury goods.
B correct: second-hand clothing is often inferior because demand may fall as income rises.
C wrong: expensive restaurant meals are usually normal/luxury goods.
D wrong: private healthcare is usually normal.

24. Answer: B

A wrong: demand for inferior goods usually falls as income rises.
B correct: consumers switch to better alternatives when income rises.
C wrong: income changes can shift demand.
D wrong: elasticity is not the issue.

25. Answer: A

A correct: demand for inferior goods usually rises when income falls.
B wrong: that is typical for normal goods when income falls.
C wrong: price does not need to rise.
D wrong: income changes shift the demand curve.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

26. Answer: B

A wrong: “demand” should not be used for movement along the curve.
B correct: a fall in price increases quantity demanded.
C wrong: income changes shift demand, not contract quantity demanded directly.
D wrong: a rise in price causes contraction, not rightward shift.

27. Answer: B

A wrong: own price causes movement along demand.
B correct: a rightward shift is caused by a non-price determinant such as income, tastes or substitutes.
C wrong: production cost affects supply.
D wrong: quantity supplied is a supply concept.

28. Answer: A

A correct: a leftward demand shift means less is demanded at every price.
B wrong: more at every price is a rightward shift.
C wrong: own price change causes movement, not shift.
D wrong: supply does not have to fall.

29. Answer: B

A wrong: this is consumer demand for a final good.
B correct: demand for workers is derived from demand for the goods/services they help produce.
C wrong: this is income-related demand.
D wrong: free goods do not explain derived demand.

30. Answer: B

A wrong: joint demand is for goods demanded together.
B correct: labour demand is derived from demand for the final product.
C wrong: individual demand is demand from one consumer.
D wrong: excess demand means shortage.

31. Answer: B

A wrong: less bought at every price is a leftward shift.
B correct: more consumers increase market demand.
C wrong: higher own price causes contraction in demand.
D wrong: supply increase affects the supply curve first.

32. Answer: A

A correct: more people usually means more total demand for food.
B wrong: population growth does not reduce food demand.
C wrong: contraction is caused by higher price.
D wrong: quantity supplied does not automatically fall.

33. Answer: B

A wrong: health warning reduces attractiveness.
B correct: negative information reduces demand and shifts the curve left.
C wrong: extension is caused by falling price.
D wrong: warnings can change tastes and demand.

34. Answer: B

A wrong: increase in demand is a rightward shift.
B correct: lower price causing higher quantity demanded is extension in demand.
C wrong: demand has not shifted left.
D wrong: contraction occurs when price rises.

35. Answer: C

A wrong: extension is caused by a fall in own price.
B wrong: contraction is caused by a rise in own price.
C correct: higher income increasing demand at every price is an increase in demand.
D wrong: quantity demanded does not decrease here.

36. Answer: D

A wrong: income can affect demand.
B wrong: tea may be a substitute, so its price can affect coffee demand.
C wrong: tastes affect demand.
D correct: wages of coffee farm workers affect supply costs, not demand.

37. Answer: C

A wrong: higher wages do not directly increase demand.
B wrong: they do not directly decrease consumer demand.
C correct: higher worker wages raise production costs, reducing supply.
D wrong: quantity demanded does not “shift.”

38. Answer: B

A wrong: a rise in umbrella price causes contraction.
B correct: expected rain increases the usefulness of umbrellas, shifting demand right.
C wrong: production costs affect supply.
D wrong: lower umbrella price causes extension.

39. Answer: B

A wrong: market demand is normally greater than or equal to individual demand.
B correct: market demand is the sum of all individual demands at each price.
C wrong: demand is always related to price.
D wrong: individual demand is demand by one buyer, not supply.

40. Answer: C

A wrong: 9 is one consumer’s demand at $4.
B wrong: 15 is one consumer’s demand at $4.
C correct: at $6, market demand = 4 + 5 + 8 = 17 units.
D wrong: 30 is market demand at $4.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

41. Answer: B

A wrong: this reverses the meanings.
B correct: demand is the whole price-quantity relationship; quantity demanded is one amount at one price.
C wrong: demand is not supply.
D wrong: demand can exist at many prices.

42. Answer: B

A wrong: if complements, higher chicken price would reduce fish demand.
B correct: chicken and fish are substitutes, so dearer chicken increases demand for fish.
C wrong: the relationship is about substitutes, not income.
D wrong: chicken is not a free good.

43. Answer: B

A wrong: substitutes move in opposite demand response to price changes.
B correct: phones and phone cases are complements, so higher phone price reduces demand for cases.
C wrong: they are related goods, not independent.
D wrong: income is not involved.

44. Answer: A

A correct: cheaper coffee causes extension in quantity demanded of coffee and, because coffee and sugar are complements, demand for sugar rises.
B wrong: higher coffee price would reduce quantity demanded of coffee and likely reduce demand for sugar.
C wrong: income does not cause quantity demanded movement along coffee demand.
D wrong: production costs affect supply, not demand.

45. Answer: B

A wrong: that is a supply schedule.
B correct: a demand schedule shows quantities demanded at different prices.
C wrong: one price and one quantity is a point, not a schedule.
D wrong: costs relate to supply/production.

46. Answer: B

A wrong: that explains supply, not demand.
B correct: lower prices usually encourage consumers to buy more.
C wrong: firms’ profit is not why demand slopes down.
D wrong: resources do not become unlimited.

47. Answer: B

A wrong: colder weather reduces demand for air conditioners.
B correct: hotter weather increases demand at every price.
C wrong: higher own price causes contraction.
D wrong: supply changes do not directly shift demand.

48. Answer: A

A correct: a fall in own price causes movement down along the demand curve.
B wrong: a rise in price causes movement up.
C wrong: income changes shift demand.
D wrong: substitute price changes shift demand.

49. Answer: B

A wrong: a fall in price causes movement down.
B correct: a rise in price causes movement up along the demand curve.
C wrong: advertising shifts demand.
D wrong: population shifts market demand.

50. Answer: A

A correct: if cheaper X reduces demand for Y, consumers switch from Y to X, so X and Y are substitutes.
B wrong: if they were complements, cheaper X would increase demand for Y.
C wrong: income is not involved.
D wrong: Y still has demand, but it decreases.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.